Ear to the River

Ear to the River March 2022

TO THE

FINAL REPORT Hydropower Industry Research of Owners for Owners

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“Improve the market structure to recognize hydro and all of its attributes, and improve the access to lowcost financing. Lastly, improve the regulatory environment….climate and perception are the biggest challenges we face in the hydropower industry.”

- Participant

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Ear to the River March 2022

Foreword The “Ear to the River” survey is a new annual survey of the North American hydroelectric industry that was developed through a partnership between the Ontario Waterpower Association, the Hydropower Foundation, and Kleinschmidt Associates in 2021. The need for this survey was that most of the information currently available about the hydro industry is based on public information such as FERC filings. T hough this information is helpful in understanding where the industry is currently, it doesn’t necessarily help the industry know where it is going. The intent of the “Ear to the River” annual survey of the industry is to help hydro owners understand what other owners are doing and thinking across North America. It is also intended to help lobbying efforts by providing data on how various policies could impact the role hydro plays in transitioning to a clean energy future as well as help vendors and suppliers understand opportunities in this thriving clean energy industry.

Partners and industry advisors worked to develop the focus of the survey, which for the inaugural edition focused primarily on future markets for hydropower.

A professional survey firm, GreatBlue Research, conducted and managed the survey effort. GreatBlue also conducted personal interviews with several hydropower owners to add qualitative context to the results. The survey ran until mid-November 2021 and the final results are presented herein. All respondents and individual responses are confidential and results have been presented by industry segment and geographic region.

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Ear to the River 3

Survey Demographics

26.7% 73.3%

United States U.S. Regional Representation

Northeast Mid Atlantic Southeast South Midwest

Canada

Canadian Regional Representation Alberta New Brunswick Ontario

Northwest West Other

Ear to the River 4

Quebec

Survey Participant Overview Organization Type

These responses represent a good cross section of the industry for this inaugural survey.

30 11GW

Independent hydropower producer

36.7%

Municipally owned electric utility

23.3%

Investor owned electric utility

+

16.7%

Rural co-operative electric utility

companies

13.3%

Government Agency

installed capacity

3.3%

Other

6.7% 0%

# of Facilities 1

13.8%

2-5

25% 50% 75% 100%

Megawatt Generation Capacity Less than 50

39.3%

31.0%

50 - 499

6-9

28.6%

20.7%

10 or more

34.5% 0%

25% 50% 75% 100%

500 or more

32.1%

0%

25% 50% 75% 100%

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“By continuing to provide affordable, reliable renewable energy– More importantly to position itself as a critical partner to other new sources of generation such as wind and solar and show how there is complementarity in the generation profiles, I think that would help a lot. Then the market would fix itself.”

- Participant

Key Findings The industry expects many changes over the next 3 years. Owners expect to see an increase in value for hydro due to it’s role in balancing other renewables. Owners also expect greater ancillary services market participation and continued investment in existing projects, primarily in generators, turbines, and gates. Additional key findings are listed to the right.

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Key Findings at a Glance Increase in direct power purchase agreements

Strongly increased use of batteries to firm hydro assets

Increase in bundling and collocating with other renewables

Increase in greenfield pumped storage development

Strong concern over low energy prices

Increase in incentive program participation, where possible

Support for investment tax credits

Increase in decommissioning activity, primarily due to project economics

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Key Findings - Executive Summary Direct Purchase Power Agreements Participation in direct power purchase agreements with corporations, ISOs/ IESO, government entities, universities and municipalities, and RTOs is expected to increase over the next 3 years, with the largest increases among corporations, universities and municipalities.

Ancillary Service Markets While more than one-half of all survey participants (53.3%) are currently involved in ancillary service markets, four-fifths (80.0%) expect to be involved within the next 3 years. Recognition of hydropower’s ability to balance more intermittent renewables, such as wind and solar, is expected to increase (26.7% believe it is currently being recognized while 81.8% expect it to be in the future).

Bundling The frequency of organizations bundling hydropower with other renewables or battery storage to deliver firm power contracts is expected to more than double over the next 3 years (23.3% currently bundle hydropower while 60.0% expect to within the next 3 years).

Co-Locating Within the next 3 years there will be significant increases in co-locating activities such as deploying batteries as an energy storage solution, planning additional renewable energy or battery storage at their facility, and co-locating hydrogen production facilities to produce hydrogen from hydroelectricity. Respondents from the United States were more likely to deploy batteries in the future than co-locate other renewable energy.

Micro-Grid Applications While the frequency of hydropower owners utilizing hydropower based micro-grid applications will increase over the next 3 years, this increase is not expected to be substantial.

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Ear to the River March 2022

Decommissioning Over a third of U.S. hydropower owners surveyed are “actively considering” decommissioning a facility while only 13.6% of these owners had previously considered decommissioning. Survey participants from Canada (37.5% and 62.5%, respectively) and those with 3 or more hydropower assets (28.6% and 57.1%, respectively) were more likely to have previously or be actively considering decommissioning any facilities. Economics was indicated by all survey participants as the primary factor for considering decommissioning environmental considerations and dam safety were also prominent factors.

Pumped Storage Roughly one-quarter of survey participants from the United States and Canada anticipate developing pumped storage / greenfield developments within the next 3 years. Many have also recently made facility enhancements at existing pumped storage projects such as adding new units or upgrading capacity.

Renewable Energy Incentives Survey respondents indicated high levels of support and participation for renewable / clean energy credit sales, production tax credit, investment tax credit, bond programs, and the EPAct 2005 Section 242 production incentive, with participation for each expecting to increase within the next 3 years.

Tax Credits Survey respondents indicated high levels of support and participation for renewable / clean energy credit sales, production tax credit, investment tax credit, bond programs, and the EPAct 2005 Section 242 production incentive, with participation for each expecting to increase within the next 3 years.

The Future of Hydropower The top concerns for hydropower owners over the next 3 years centered on low energy prices, high capital costs (for new development), dam / public safety requirements and potential for additional costs, and the lengthy and expensive process for licensing and / or re-licensing. Generator rewinds and turbine overhauls are primarily the facility changes or upgrades being prioritized over the next 3 years.

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SURVEY QUESTIONS

Direct Power Purchase Agreements Question: “Are you currently participating in, or within the next 3 years do you expect to participate in, any direct power purchase agreements with…”

46.7%

Corporations

73.3% 46.7% 50.0%

ISOs / IESOs Government Entities

36.7% 46.7%

Universities or Municipalities

26.7% 46.7%

Currently

10.0%

RTOs

26.7%

0%

20%

In the Future

40%

60%

80%

100%

Survey participants were most likely to: Survey participants indicated being more likely to participate in the future in direct power agreements with each of these five (5) types of organizations than currently.

currently participate in direct power purchase agreements

73.3%

46.7%

in the future participate in direct power purchase agreements

with corporations, followed by ISOs/IESO’s

46.7% Ear to the River 10

currently

50% in the future

SURVEY QUESTIONS

Direct Power Purchase Agreements Question: “Are you currently participating in, or within the next 3 years do you expect to participate in, any direct power purchase agreements with…”

Number of Hydropower Facilities....

3 or more Current

Future

Corporations

52.4%

81.0%

ISOs/IESOs

61.9%

66.7%

Government Entities

47.6%

52.4%

Universities and Municipalities

38.1%

61.9%

RTOs

14.3%

33.3%

Survey participants with more than 3 facilities were more likely to participate in direct power purchase agreements in the future than they are now. Direct power purchase agreements with corporations are expected to be the most common type.

“Fifty-five percent of our assets are merchant ownedselling into market at whatever price we can get instead of a contract.” - Survey Participant

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SURVEY QUESTIONS

Ancillary Markets & Regional Marketplace Question: “Are you currently involved in, or within the next 3 years do you expect to be involved in any energy, capacity, and/or ancillary service markets?”

100%

More than one-half of all survey participants

80%

are currently involved in energy,

60%

53.3%

capacity, and/or ancillary service markets,

80%

while four-fifths expect to be involved in ancillary service markets within the next years.

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80.0%

53.3%

40% 20% 0% Currently

In the Future

Type of Organization…

Current

Future

Investor owned electric utility

60.0%

100.0%

Municipally owned electric utility

42.9%

71.4%

Rural co-operative electric utility

25.0%

75.0%

Independent hydropower producer

72.7%

81.8%

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Independent hydropower producers (72.7%) and investor owned electric utilities (60.0%) have the highest current and future involvement in energy, capacity, and/or ancillary service markets.

SURVEY QUESTIONS

Ancillary Markets & Regional Marketplace Question: 26.7%

“In your region’s electricity marketplace, is hydropower’s ability to balance more intermittent renewables, such as wind and solar, recognized and compensated for?”

Yes No

73.3%

Question:

18.2%

81.8%

Yes No

“Do you expect that at some point in the future, your region’s electricity marketplace will recognize and compensate for hydropower’s ability to balance more intermittent renewables, such as wind and solar?”

While only one-quarter of all survey participants (26.7%) reported that hydropower’s ability to balance more intermittent renewables is recognized and compensated for in their region’s electricity marketplace, more than four-fifths (81.8%) indicated they expect their region’s electricity marketplace will recognize and compensate for this at some point in the future.

Type of Organization

InvestorMunicipallyRural Independent Owned Electric Owned Electric Co-Op Electric Hydropower Utility Utility Utility Producer

In your region’s electricity marketplace, is hydropower’s ability to balance more intermittent renewables, such as wind and solar, recognized and compensated for? (“Yes”)

40.0%

28.6%

25.0%

9.1%

Do you expect that at some point in the future, your region’s electricity marketplace will recognize and compensate for hydropower’s ability to balance more intermittent renewables, such as wind and solar? (“Yes”)

100.0%

80.0%

66.7%

80.0%

Investor owned electric utilities (40.0%), were the organizations most likely to indicate that hydropower’s ability to balance intermittent renewables is recognized and compensated for in their region’s electricity marketplace. All sectors expect more compensation in the future.

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SURVEY QUESTIONS

Bundling Question: “Are you currently, or within the next 3 years do you expect to, bundle hydropower with other renewables or battery storage to deliver firm power contracts?”

100% 80% 60.0%

60% 40% 23.3%

20%

While less than one-quarter of all survey participants (23.3%) reported they currently bundle hydropower with other renewables or battery storage to deliver firm power contracts, three-fifths (60.0%) indicated they expect to do this within the next 3 years.

0% Currently

In the Future

Question: “Are you currently, or within the next 3 years do you expect to, bundle hydropower with other renewables or battery storage to deliver firm power contracts?”

InvestorOwned Electric Utility

MunicipallyOwned Electric Utility

Rural Co-Op Electric Utility

Independent Hydropower Producer

Current

20.0%

42.9%

0.0%

18.2

Future

20.0%

85.7%

50.07%

72.7%

Type of Organization

Municipally owned electric utilities reported being the most likely to bundle hydropower with other renewables or battery storage to deliver firm power contracts both currently (42.9%) and within the next 3 years (85.7%).

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While 18.2% of independent hydropower producers are currently bundling hydropower with other renewables or battery storage, more than seven-out-often (72.7%) indicated they expect to do this within the next 3 years.

SURVEY QUESTIONS

Bundling Question: “Are you currently, or within the next 3 years do you expect to, bundle hydropower with other renewables or battery storage to deliver firm power contracts?”

While roughly a quarter of survey participants from both the United States and Canada currently bundle hydropower with other renewables or battery storage to deliver firm power contracts, an increased frequency of those from the United States expect to do so within the next 3 years (68.2%).

United States

Canada

Current

22.7%

25.09%

Future

68.20%

37.5%

One participant stated they bundled “run of the river” with battery storage, but cannot explore the potential of bundling with other renewables until it is time to renew their contract with their customers.

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SURVEY QUESTIONS

Co-Locating Question: “Are you currently, or within the next 3 years do you expect to…”

26.7%

Deploy batteries as an energy storage solution

73.3%

Plan physical co-location of additional renewable energy or battery storage at your hydro facility(ies)

10.0% 56.7%

Develop pumped storage / greenfield developments as an energy storage solution Co-locate hydrogen production facilities to produce hydrogen from hydroelectricity

13.3% 26.7% 0.0% 33.3%

0%

20%

40%

Currently Approximately a quarter (26.7%) of survey participants currently deploy batteries as an energy storage solution while almost three quarters (73.3%) expect to do so within the next 3 years.

While only one-in-ten respondents (10.0%) currently plan physical co-location of additional renewable energy or battery storage at their facility(ies), more than one-half (56.7%) expect to do so within the next 3 years.

60%

80% 100%

In the Future No survey participant is currently involved in co-locating hydrogen production facilities to produce hydrogen from hydroelectricity but one third (33.3%) expect to do so within the next 3 years.

“Looking to build a hydroplant where we have the reservoir and resources; 10 miles away we’re looking at installing grid-scale solar. They’re not on the same piece of land, but they’re very specifically going to be co-designed to operate together in the community.” - Participant

Ear to the River 16

SURVEY QUESTIONS

Co-Locating Country…

United States

Canada

Current

Future

Current

Future

Deploy batteries

22.7%

81.8%

37.5%

50.0%

Plan physical colocation of additional renewable energy

4.5%

59.1%

25.0%

50.0%

Develop pumped storage / greenfield developments

18.2%

27.3%

0.0%

25.0%

Co-locate hydrogen production facilities

0.0%

31.8%

0.0%

37.5%

Use of batteries at hydro sites is expected to grow throughout North America. Respondents from the United States were more likely to deploy batteries in the future than co-locate other renewable energy.

Roughly one-quarter of survey participants from the United States (27.3%) and Canada (25.0%) anticipate developing pumped storage / greenfield developments within the next 3 years, while approximately a third anticipate co-locating hydrogen production facilities to produce hydrogen from hydroelectricity in the future.

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SURVEY QUESTIONS

Investments in Pumped Storage Question: “Have you made any existing facility enhancements with respect to pumped storage projects such as adding new units or upgrading capacity?”

6.7%

One-in-six survey participants (16.7%) indicated they have made existing facility enhancements with respect to pumped storage projects such as adding new units or upgrading capacity, while more than three-quarters (76.7%) have not made any of these facility enhancements.

16.7%

76.7%

Yes

No

Don’t know

Micro-Grid Applications Question: “Are you currently utilizing, or within the next 3 years do you expect to utilize, any hydropower based micro-grid applications?”

100%

One-out-of-six survey participants (16.7%) currently utilizes hydropower based micro-grid applications, while slightly more than one-quarter (26.7%) expect to do so within the next 3 years.

80% 60% 40% 26.7%

20%

Ear to the River 18

16.7%

0% Currently

In the Future

SURVEY QUESTIONS

Pumped Storage Rendering

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SURVEY QUESTIONS

Decommissioning Question: “Have you previously, or are you actively considering, decommissioning any facilities?”

100%

One-fifth of survey participants (20.0%) have previously considered decommissioning any of their facilities, while more than two-fifths (43.3%) are actively considering doing so in the future.

80% 60% 43.3%

40% 20.0%

20% 0%

Previously Actively Considering

Survey participants from Canada (37.5% and 62.5%, respectively) and those with 3 or more hydropower assets (28.6% and 57.1%, respectively) were more likely to have previously or be actively considering decommissioning any facilities.

Investor owned electric utilities were most likely to have previously considered decommissioning any facilities (40.0%), while municipally owned electric utilities (71.4%) were most likely to be actively considering decommissioning.

Ear to the River 20

Previously

Actively Considering

%

%

United States

13.6%

36.4%

Canada

37.5%

62.5%

%

%

2 or fewer

0.0%

12.5%

3 or more

28.6%

57.1%

%

%

Investor owned electric utility

40.0%

40.0%

Municipally owned electric utility

28.6%

71.4%

Rural co-operative electric utility

0.0%

25.0%

Independent hydropower producer

18.2%

45.5%

Decommissioning…

Country…

# of Hydropower Facilities…

Type of Organization…

“Previously, no. Actively decommissioning, there may be one or two that we may do. It’s mostly economics, the facility no longer lends itself to be economically viable. That could be for a million reasons—relicensing terms and other kinds of things.” - Participant

SURVEY QUESTIONS

Decommissioning Question: “What are the primary factors for considering decommissioning a facility?”

All survey participants (100.0%) indicated that economics were a primary factor when considering decommissioning a facility, while slightly less than one-half reported environmental considerations (46.2%) or dam safety (46.2%) to be considerations when decommissioning a facility.

Economics

100.0%

Environmental considerations

46.2%

Dam safety

46.2%

“Currently, in the process of decommissioning. It is a really small plant that no longer serves any use to us.” - Participant

0%

20%

40%

60%

Economics

Environmental considerations

Dam safety

%

%

%

United States

100.0%

62.5%

37.5%

Canada

100.0%

20.0%

60.0%

%

%

%

Investor owned electric utility

100.0%

50.0%

50.0%

Municipally owned electric utility

100.0%

40.0%

40.0%

Rural co-operative electric utility

100.0%

0.0%

0.0%

Independent hydropower producer

100.0%

60.0%

60.0%

Reasons for Decommissioning…

Country…

Type of Organization…

While respondents from the United States were more likely to indicate that environmental considerations (62.5%) are a factor when considering decommissioning, respondents from Canada placed increased consideration on dam safety (60.0%).

80%

100%

Reasons given by in-depth survey participants centered on economics, stating that the facilities would cost more to relicense and modernize than the value of energy they would output.

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SURVEY QUESTIONS

Renewable Energy Incentives Question: “Are you currently participating in, or within the next 3 years do you expect to participate in…”

Renewable / clean energy credit sales

53.3% 33.3% 43.3%

Production Tax Credit

30.0%

Investment Tax Credit

EPAct 2005 Section 242…

13.3%

0%

20%

30.0%

40%

Currently While more participants currently participate in production tax credits (33.3%) as opposed to investment tax credits (30.0%), an increased frequency anticipate participating in investment tax credits in the future (46.7%) compared to production tax credits (43.3%).

Survey participants were most likely to both currently (53.3%) and in the future (76.7%) participate in renewable / clean energy credit sales.

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46.7%

30.0% 36.7%

Bond programs

Ear to the River

76.7%

60%

80%

In the Future

100%

SURVEY QUESTIONS

Renewable Energy Incentives Country…

Renewable / clean energy credit sales

United States

Canada

Current

Future

Current

Future

68.2%

81.8%

12.5%

62.5%

Survey participants from the United States were most likely to have currently (68.2%) or plan to participate in the future (81.8%) in renewable / clean energy credit sales than respondents from Canada.

All of the in-depth interview participants indicated they would take advantage of Production Tax Credits and Investment Tax Credits, if these were passed in new legislation

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SURVEY QUESTIONS

Tax Credits Question: “The National Hydropower Association is working towards legislation to renew the Investment Tax Credit which allows hydropower developers to receive a 30% tax credit for new development. How aware are you of this current legislative effort?”

More than three-quarters of United States survey participants, 77.3%, indicated being either “very aware” (31.8%) or “somewhat aware” (45.5%) of the National Hydropower Association’s legislative efforts to renew the Investment Tax Credit which allows hydropower developers to receive a 30% tax credit for new development.

Very aware

31.8%

Somewhat aware

45.5%

Not very aware

9.1%

Not aware at all Don't know

13.6% 0.0%

0%

20%

40%

60%

80% 100%

Question: “If this legislation regarding the Investment Tax Credit was passed, how beneficial do you believe it would be toward generating future investments in hydropower?”

Very beneficial

40.9%

Somewhat beneficial

45.5%

Not very beneficial

9.1%

Not beneficial at all Don't know

4.5% 0.0%

0%

Ear to the River 24

More than four-fifths of United States survey participants, 86.4%, indicated the passing of legislation regarding the renewal of the Investment Tax Credit is either “very beneficial” (40.9%) or “somewhat beneficial” (45.5%) toward generating future investment in hydropower.

20%

40%

60%

80% 100%

The Future of

Hydropower

“Needs a level playing field. There is a lot of federal support, will and momentum behind wind and solar, but I would say it’s the opposite for hydropower. There are barriers, opposition, regulatory barriers. Hydropower isn’t even considered renewable energy in most venues—so a lot of the clean energy programs that offer incentives or credits (don’t) apply to hydropower…all the tools you can use the hydro-plant to help mitigate climate change.

I think the prominence of hydropower should grow in a climate change environment. The droughts in California would have been worse had they not had the water reservoir to rely on.”

- Participant

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Ear to the River 26

SURVEY QUESTIONS

The Future of Hydropower Question: “Over the next 3 years, how concerned is your organization about…”

Low energy prices

Survey participants indicated their organization is most concerned (either “very” or “somewhat”) over the next 3 years with low energy prices (93.3%), followed by high capital costs (for new development) (86.7%), dam / public safety requirements and potential for additional costs (83.3%) and lengthy and expensive process for licensing and / or relicensing (83.3%).

6.7%

93.3%

High capital costs (for new development)

86.7%

13.3%

Dam / public safey requirements and potential for additional costs

83.3%

16.7%

Lengthy and expensive regulatory process for licensing and / or relicensing

83.3%

16.7%

Droughts, floods, or "extreme weather events"

80.0%

20.0%

PPAs expiring

40.0%

60.0%

0% Very & Somewhat Concerned

20%

40%

60%

80%

100%

Not Very & Not Concerned At All

Question: “Over the next 3 years, how concerned is your organization about…”

Survey participants from Canada indicated higher levels of concern (either “very” or “somewhat”) for five (5) of six (6) characteristics effecting the future of hydropower, as compared to respondents from the United States. Those respondents from the United States reported increased levels of concern for high capital costs when compared to respondents from Canada.

United States

Canada

Low Energy Prices

90.0%

100.0%

High Capital Costs

95.5%

62.5%

Dam/Public Safety Requirements

77.3%

100.0%

77.3%

100.0%

77.3%

87.5%

50.0%

87.5%

Lengthy and Expensive Regulatory Process for Licensing Druoght, Floods, or Extreme Weather Events PPAs Expiring

27

SURVEY QUESTIONS

The Future of Hydropower While high levels of concern were generally reported for each characteristic effecting the future of hydropower, rural co-operative and municipally owned electric utilities expressed slightly less concern over the listed issues than investor owned electric utilities and independent hydropower producers.

InvestorMunicipallyRural Independent Owned Electric Owned Electric Co-Op Electric Hydropower Utility Utility Utility Producer

Type of Organization Low Energy Prices

100.0%

85.7%

75.0%

100.0%

High Capital Costs

80.0%

100.0%

75.0%

81.8%

Dam/Public Safety Requirements

100.0%

100.0%

50.0%

81.8%

Lengthy and Expensive Regulatory Process for Licensing

80.0%

85.7%

75.0%

90.0%

Druoght, Floods, or Extreme Weather Events

100.0%

85.7%

25.0%

90.9%

PPAs Expiring

40.0%

28.6%

50.0%

100.0%

Question: “Is your organization planning any of the following facility changes or upgrades over the next 3 years? Select all that apply.”

Generator rewinds

63.3%

Turbine overhauls

63.3%

Gate replacements

46.7%

Penstock replacement

23.3%

Other

20.0%

NA / none of the above

16.7%

0%

Ear to the River 28

When anticipating facility changes or upgrades over the next 3 years, almost two thirds of all survey respondents, 63.3%, indicated their organization is planning generator rewinds or turbine overhauls, while almost half (46.7%) are planning gate replacements over the next 3 years.

20%

40%

60%

80%

100%

Ear to the River March 2022

SURVEY QUESTIONS

Survey participants from Canada were more likely to be planning to make facility changes or upgrades over the next 3 years as compared to respondents from the United States, specifically for generator rewinds (75.0%), turbine overhauls (75.0%), gate replacements (50.0%) and penstock replacement (37.5%).

Type of Organization

United States

Canada

Generator Rewinds

59.1%

75.0%

Turbine Overhauls

59.1%

75.0%

Gate Replacements

45.5%

50.0%

Penstock Replacement

18.2%

37.5%

Other

27.3%

0.0%

N/A - None of the Above

18.2%

12.5%

InvestorMunicipallyRural Independent Owned Electric Owned Electric Co-Op Electric Hydropower Utility Utility Utility Producer

Government Agency

Generator Rewinds

80.0%

71.4%

0.0%

72.7%

100.0%

Turbine Overhauls

60.0%

85.7%

25.0%

63.6%

100.0%

Gate Replacements

80.0%

42.9%

0.0%

54.5%

100.0%

20.0%

28.6%

0.0%

36.4%

0.0%

0.0%

42.9%

0.0%

18.2%

100.0%

0.0%

0.0%

75.0%

9.1%

0.0%

Penstock Replacement Other N/A - None of the Above

Respondents from rural co-operative electric utilities were least likely to be planning to make facility changes or upgrades over the next 3 years. Investor owned electric utilities were more likely to be planning generator rewinds or gate replacements, while municipally owned electric utilities were more likely to be planning turbine overhauls.

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Project Proposal

The Future of Hydropower Additional Insights

More than one-third of survey respondents with 2 or fewer hydropower assets (37.5%), are not planning on making any facility changes or upgrades over the next 3 years. Survey respondents with 3 or more assets were more likely to be planning turbine overhauls (85.7%), generator rewinds (76.2%), gate replacements (66.7%) or penstock replacement (33.3%).

Ear to the River 30

Number of Hydropower Facilities

2 or Fewer

3 or More

Generator Rewinds

37.5%

76.2%

Turbine Overhauls

12.5%

85.7%

Gate Replacements

0.0%

66.7%

Penstock Replacement

0.0%

33.3%

Other

37.5%

14.3%

N/A - None of the Above

37.5%

4.8%

Ear to the River March 2022

Biggest Threats/Challenges Low Energy Prices High Costs of Development

Climate Change

Regulatory Burdens Perception Relative to Other Renewables

How Can the Industry Grow in Clean Energy Future?

Equal Footing on Incentives with Other Renewables

Lobbying for Recognition of Key Role Hydro Plays

Raise Public Awareness

Quicker and Less Expensive Licensing Process

In-depth interview participants indicated that, overall, the biggest threat facing the hydropower industry is that other renewable energy resources are more publicly visible whereas hydropower, in both the public and federal viewpoint, is not always considered a renewable resource.

These participants indicated that if all renewable energy entities worked together cohesively, that the public perspective surrounding hydropower will change to be more positive.

Additionally, in-depth interview participants indicated that hydropower has significant costs and regulations associated with owning and operating facilities, and that these costs could become less burdensome if the hydropower industry was recognized and compensated for within the renewable energy marketplace.

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Closing This was the first annual “Ear to the River” survey. The participation from industry was excellent, with over 11 GW of hydro generation represented. We are very thankful and appreciative of all the project owners who took the time to complete the survey and who agreed to be interviewed. The results provide many insights into major trends that are expected to impact the industry over the next several years.

In future years we are hoping to see even greater participation and be able to provide more detailed analysis within key segments of the industry. Planning for the 2022 survey effort has now started. Please let us know if you have specific questions for the industry – we’re listening.

Giving Back To promote hydropower education and the need for a hydro workforce in the future, we donated 50 hydropower science kits to STEM programs at the following schools. Many of the schools were recommended by survey participants.

Badin Elementary - Badin, NC Christ the King - Haddonfield, NJ Hanford High School - Richland, WA Hood River Valley High School - Hood River, OR Hunter College Elementary School - NYC, NY Jean de la Mennais - La Prairie, Quebec Pleasant Park Public School - Ottawa, Ontario River Oak Christian Academy - Jefferson City, MO University of Wisconsin - Madison, WI Valdez Middle School - Valdez, AK

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Ear to the River March 2022

Study Partners / Industry Advisory Board Linda Church Ciocci Hydropower Foundation

Paul Norris, President Ontario Waterpower Association

Jose Zayas, Sr. Vice President, Innovation & Partnerships Eagle Creek Energy

Tina Mills, Hydro Licensing Specialist Southern Company

Jeff Leahy, Vice President SMI

Tim Oakes, Vice President, Power & Energy Kleinschmidt Associates

Russ Sanford, FSMPS, CPSM Chief Growth Officer Kleinschmidt Associates

Kathy Lewis, Program Administrator Kleinshcmidt Associates

If you have any questions about this survey, please reach out to: Tim Oakes Kleinschmidt Associates tim.oakes@kleinschmidtgroup.com

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Hydropower Industry Research of Owners for Owners

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